Textile sector: Missed opportunity for UPA

The lack of flexibility in hiring, along with infrastructural constraints, has led to the country’s textile sector witness its competitiveness ebb in key markets.

Published:March 28, 2014 2:17 am

Seven years ago, almost to the date, the country’s textile industry had forwarded a comprehensive proposal to the UPA government seeking some degree of flexibility in the labour hiring policy for the sector.

Enthused by the rural employment guarantee law that promised jobs for 100 days a year to every member of a poor family, the textile industry — one of the country’s largest employers — promised to better the NREGA provisions by proposing to hire workers and guaranteeing them employment for at least 200 days a year at double the notified wages promised under the government jobs scheme.

While undertaking this, the textiles sector, which is faced with highly seasonal demand, wanted the flexibility to lay off some of the workers when the export orders slacken in the lean season. This would have enabled the larger units to ramp up production, with all the associated benefits of increased productivity, even as workers stood to gain at least 200 days of assured work at textile mills and garmenting factories across the country. Despite the scheme serving to take forward broadly what the government had itself legitimised under the NREGA, the UPA government chose not to respond to the industry’s proposal that was made in April 2007.

One of the results of the lack of flexibility in hiring, along with all the entire gamut of infrastructural constraints faced by Indian industry, is that the country’s textile and garments sector has seen its competitiveness ebb in key markets such as the US and the EU on account of competition from exporters from Vietnam, Indonesia, Bangladesh and Pakistan, something that has only become more pronounced over the last five years.

So, it is ironical that the UPA should now bother to incorporate “a more flexible labour policy as needed for maintaining competitiveness” as one of its key poll promises in the upcoming elections. It signifies one of the several missed opportunity for the UPA. Most of its other promises to industry too come across as lip service, considering its uninspiring record in the last five years. These include the promise of restoring India to an “8 per cent plus growth rate within 3 years”, ensuring that India has “a globally competitive business and investment- friendly environment” and the pledge “to take firm action to control inflation”.

The promise to introduce the Goods and Services Tax Bill, incidentally, figured in the Congress’ 2009 manifesto as well. The party’s vision of building India as “the world leader in manufacturing” too sounds like a pipe dream, considering how abjectly it squandered an opportunity the textile sector threw in its way well over half a decade ago.